Today: Tesla announces plans for its battery factory, with the so-called Gigafactory expected to be up and running by 2020, costing $4 billion to $5 billion and producing more batteries than 2013's global output.

Tesla said that it will invest $2 billion into the facility, with partners joining in for a total expenditure of $4 billion to $5 billion through 2020, when the Palo Alto company expects the so-called Gigafactory to be able to produce at a rate as yet unseen in the world. Tesla did not officially announce its partners in the effort, though Panasonic -- which produces the batteries Tesla uses in its cars -- is expected to be involved.

"The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013," a Tesla blog post read.

Advertisement

Tesla also announced that it would sell $1.6 billion in debt to help finance the factory, as well as development of its "Gen III" vehicle, a sedan similar to the Model S that Tesla expects to sell for a much lower price, about $35,000. The ability to produce cheap batteries is a critical part of the company's plan to offer a cheaper electric car, which is seen as crucial to the continuing development of electric vehicles.

"By the end of the first year of volume production of our mass market vehicle, we expect the Gigafactory will have driven down the per kWh cost of our battery pack by more than 30 percent," the blog post read.

The facility will be built on a lot between 500 and 1,000 acres in size, with up to about 10 million square feet of production space, and will employ roughly 6,500 workers, Tesla said. The company hopes to build new renewable energy sources to power the factory, with a focus on solar and wind power.

"Tesla's quest to disrupt a trillion-dollar car industry offers an adjacent opportunity to disrupt a trillion-dollar electric utility industry," Jonas wrote. "If it can be a leader in commercializing battery packs, investors may never look at Tesla the same way again."

Tesla set new intraday and closing record prices Wednesday, moving as high as $265 before closing with a 2 percent gain at $253. Shares shot up again after the close, when Tesla released its Gigafactory details, topping $260. SolarCity also rose to new all-time highs Wednesday, gaining 4.6 percent to $84.93 after moving as high as $88.35, continuing a rocket ride for the two companies that combined to add more than $1 billion to Musk's worth in one day.

Apple dropped 0.9 percent to $517.35 after IDC reported that the growth rate for smartphone shipments is expected to begin slipping in 2014, with pressure being applied especially to companies that focus on premium smartphones such as Apple's iPhone. "2014 will be an enormous transition year for the smartphone market," IDC's Ryan Reith said in Wednesday's announcement, later adding, "New markets for growth bring different rules to play by and 'premium' will not be a major factor in the regions driving overall market growth." While Apple will continue to generate strong revenues and profits with an average selling price of more than $600 on the iPhone, the company's market share will continue to decline while phones utilizing Google's Android operating system and Microsoft's Windows Phone offering will gain, IDC predicted. After Apple dipped from 18.7 percent of the market in 2012 to 15.2 percent in 2013, IDC predicts the Cupertino company will control 14.9 percent of the market in 2014 and 14.4 percent in 2018. Apple also appealed a court ruling Wednesday that determined the company illegally maneuvered to boost prices of electronic books.

And the widely watched Standard & Poor's 500 index: Up 0.04 to 1,845.16

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.